May 5, 2021 At the end of 2020, semiconductors were suddenly in short supply. Bleeding-edge chips powering the latest smartphones, gaming consoles, and 5G modems, as well as older models running cars and household appliances, could hardly be found at any price. Goldman Sachs estimates at least 169 industries faced disruptions as a result of the shortages, potentially shaving 1% off US GDP in 2021. All this began with a relatively minor bump in consumer demand brought on by the pandemic. First, consumer spending tanked. Then, a few months later, demand for all kinds of chip-heavy gadgets rose unexpectedly as people set up home offices or sought out electronic diversions. The companies that build those devices then sent a wave of semiconductor orders rippling up the supply chain, which quickly overwhelmed the few chip foundries that manufacture virtually all of the world’s computer chips. Shortages ensued.